Britain needs to make extensive changes to recover from its economy's failings, rising inequality and the destructive inheritance of the financial crisis, according to a new report.
The report, "Prosperity and Justice: A Plan for the New Economy," commissioned by the Institute for Public Policy Research, focused on the issues that led to Britain's people voting to leave the E.U. in the 2016 referendum.
“[The vote] was a stark repudiation of the status quo and crystallized profound feelings of economic injustice,” wrote the authors. Justin Welby, the Archbishop of Canterbury, was on the report’s committee and said of Britain’s escalating inequality:
“For decades the U.K. economy has not worked as it should, with millions of people and many parts of the country receiving less than their fair share. The widening gap between rich and poor, and fears about the future among young people and their parents, have damaged our nation’s sense of itself. Achieving prosperity and justice together is not only a moral imperative – it is an economic one.”
The committee, which included a trade union leader, academics and business executives, highlighted that earnings have remained stagnant in Britain for a decade amid rising job insecurity. The report noted that young people, unable to afford their own homes, have been hit particularly hard, and that entire communities are being left behind.
The report concluded that to counterbalance Britain’s economic failings that produced such gaping inequality, the country needs stronger trade unions and greater worker representation alongside higher taxes imposed on the rich and large inheritances, and much steeper regulation of giant social media corporations.
The committee called for economic power to be rebalanced from the hands of corporations to trade unions, and that political power gets devolved from London to other parts of the country. It also called for more affordable housing to help first-time buyers get into the market and to fight unsustainable housing price inflation.
The authors additionally called for the minimal wage to be increased, with higher pay for those struggling to survive financially on zero-hour and temporary contracts. The report said wealth should be taxed on an equal basis, raised on corporations and the wealthy.
A Crisis Too Large to Ignore
Economic inequality in Britain in stifling and you don’t have to travel far before the disturbingly blatant differences between the haves and the have nots stare you in the face.
The now ubiquitous food bank collection points in so-called "middle class" supermarkets like Waitrose and Sainsbury’s are a poignant example of the U.K.'s burgeoning wealth inequality.
With the price of food rising – due partly to the uncertainties and complications caused by Brexit, and also the rollout of the shambolic new Universal Credit welfare benefit system, which fails to cover even basic living costs – food bank usage is reaching its highest rate on record.
Figures from the Trussel Trust, the U.K.’s national food bank provider, show that in the year leading up to March 2018, more than 1.3 million three-day emergency food supplies were delivered to people in crisis across Britain – a 13 percent rise from 2017.
The highly contested Universal Credit, which replaces six other benefits with a single monthly payment, was announced by the then Work and Pensions Secretary Iain Duncan Smith at the Conservative Party Conference in 2010. The biggest grievance of the new benefits system is that many families with children are being forced to live on a lower income.
According to the Child Poverty Action Group, single parents with three children lose an average of £200 a month on Universal Credit. The financial devastation to lower income households caused by Universal Credit has even led to public Universal Credit events being put on to help claimants cope with the transition.
One such event took place recently at a pub in the working class town of New Mills, in the High Peak in North West England. The Unite Community branch organized the meeting about the roll-out of Universal Credit, which is occurring in the High Peak and affected more than 6,000 families in the area.
The High Peak’s Member of Parliament (MP), Ruth George, thanked Unite Community for organizing the meeting, and everyone who attended it. George wrote in a Facebook post:
“It is a huge challenge to make sure claimants across High Peak can receive support to claim online, during the minimum 5 week wait for payment, through benefit cuts due to debts and sanctions, and to help keep people housed when nearly 40% of claimants are in rent arrears but I’m pleased so many organizations and volunteers are coming together."
In stark contrast to the Tories’ onslaught against the poor and vulnerable, and the party's punishing cuts and crippling changes to the welfare system that is exacerbating Britain’s wealth divide, Labour Party leader Jeremy Corbyn has long campaigned for many of the policies highlighted in the "Prosperity and Justice" report.
Corbyn incessantly argues for an increase in government spending and greater investment in industry. In his first major speech on the economy as leader of the government’s opposition party in 2015, he promised to raise taxes on the rich and large corporations and clamp down on tax avoidance.
Labour will close the budget deficit “through building a strong growing economy that works for all… not by increasing poverty,” said Corbyn.
But three years later, poverty and inequality in Britain remain on the rise, driven by punishing cuts to the welfare state and a rising cost of living as power is consolidated in ever fewer hands of the wealthy, powerful and elite.